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A Comparison of Health Risk and Costs Across Private Insurance Markets.
Med Care. 2020 02; 58(2):146-153.MC

Abstract

BACKGROUND

The Patient Protection and Affordable Care Act (PPACA) established new parameters for the individual and small group health insurance markets starting in 2014. We study these 2 reformed markets by comparing health risk and costs to the more mature large employer market.

STUDY DATA

For 2017, claims data for all enrollees in PPACA-compliant individual and small group market plans as well as claims data from a sample of large employer market enrollees.

VARIABLES AND METHODOLOGY

Risk scores and total (unadjusted and risk-adjusted) per-member-per-month (PMPM) allowed charges. Differences across markets in enrollment duration, age, and geographic distribution are addressed. The analysis is descriptive.

RESULTS

Compared with large employer market enrollees, health risk was 3% lower among PPACA small group market enrollees and 20% higher among PPACA individual market enrollees. After adjusting for differences in health risk, enrollees in the PPACA individual market had 27% lower PMPM allowed charges than enrollees in the large employer market and enrollees in the PPACA small group market had 12% lower PMPM allowed charges than enrollees in the large employer market.

CONCLUSIONS

On average, the PPACA individual market enrolls sicker individuals than the 2 group markets. But this does not translate to higher health costs; in fact, enrollees in the PPACA individual market accumulate lower allowed charges than enrollees in the large employer market. Lower-income enrollees particularly accumulate lower allowed charges. Narrower networks and increased enrollee cost-sharing among individual market plans, though they may reduce the value of coverage, likely significantly reduce allowed charges.

Authors+Show Affiliations

RTI International, Research Triangle Park, NC.Centers for Medicare and Medicaid Services, CCIIO, Baltimore, MD.Centers for Medicare and Medicaid Services, CCIIO, Baltimore, MD.RTI International, Waltham, MA.RTI International, Waltham, MA.Centers for Medicare and Medicaid Services, CCIIO, Baltimore, MD.Centers for Medicare and Medicaid Services, CCIIO, Baltimore, MD.

Pub Type(s)

Journal Article
Research Support, U.S. Gov't, P.H.S.

Language

eng

PubMed ID

31688571

Citation

Lissenden, Brett, et al. "A Comparison of Health Risk and Costs Across Private Insurance Markets." Medical Care, vol. 58, no. 2, 2020, pp. 146-153.
Lissenden B, Amin K, Drury K, et al. A Comparison of Health Risk and Costs Across Private Insurance Markets. Med Care. 2020;58(2):146-153.
Lissenden, B., Amin, K., Drury, K., Pope, G. C., Kautter, J., Sutton, E., & Peele, Y. (2020). A Comparison of Health Risk and Costs Across Private Insurance Markets. Medical Care, 58(2), 146-153. https://doi.org/10.1097/MLR.0000000000001239
Lissenden B, et al. A Comparison of Health Risk and Costs Across Private Insurance Markets. Med Care. 2020;58(2):146-153. PubMed PMID: 31688571.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - A Comparison of Health Risk and Costs Across Private Insurance Markets. AU - Lissenden,Brett, AU - Amin,Krutika, AU - Drury,Kelly, AU - Pope,Gregory C, AU - Kautter,John, AU - Sutton,Erin, AU - Peele,Yolanda, PY - 2019/11/7/pubmed PY - 2020/5/12/medline PY - 2019/11/6/entrez SP - 146 EP - 153 JF - Medical care JO - Med Care VL - 58 IS - 2 N2 - BACKGROUND: The Patient Protection and Affordable Care Act (PPACA) established new parameters for the individual and small group health insurance markets starting in 2014. We study these 2 reformed markets by comparing health risk and costs to the more mature large employer market. STUDY DATA: For 2017, claims data for all enrollees in PPACA-compliant individual and small group market plans as well as claims data from a sample of large employer market enrollees. VARIABLES AND METHODOLOGY: Risk scores and total (unadjusted and risk-adjusted) per-member-per-month (PMPM) allowed charges. Differences across markets in enrollment duration, age, and geographic distribution are addressed. The analysis is descriptive. RESULTS: Compared with large employer market enrollees, health risk was 3% lower among PPACA small group market enrollees and 20% higher among PPACA individual market enrollees. After adjusting for differences in health risk, enrollees in the PPACA individual market had 27% lower PMPM allowed charges than enrollees in the large employer market and enrollees in the PPACA small group market had 12% lower PMPM allowed charges than enrollees in the large employer market. CONCLUSIONS: On average, the PPACA individual market enrolls sicker individuals than the 2 group markets. But this does not translate to higher health costs; in fact, enrollees in the PPACA individual market accumulate lower allowed charges than enrollees in the large employer market. Lower-income enrollees particularly accumulate lower allowed charges. Narrower networks and increased enrollee cost-sharing among individual market plans, though they may reduce the value of coverage, likely significantly reduce allowed charges. SN - 1537-1948 UR - https://www.unboundmedicine.com/medline/citation/31688571/A_Comparison_of_Health_Risk_and_Costs_Across_Private_Insurance_Markets L2 - https://doi.org/10.1097/MLR.0000000000001239 DB - PRIME DP - Unbound Medicine ER -